Financial News: Eurozone Private Sector Remains In Deep Contraction

Eurozone Private Sector Remains In Deep Contraction

05/21/2020 - 04:18:00 (RTTNews)

(RTTNews) - The euro area private sector remained stuck in its deepest downturn ever in May due to the containment measures taken amid coronavirus, or Covid-19, pandemic, survey results from IHS Markit showed Thursday.

The composite output index rose to 30.5 in May from a record low 13.6 in April. A score below 50 indicates contraction.

The prior low of 36.2 was seen during the peak of the global financial crisis in February 2009. Nonetheless, the latest reading was above economists' forecast of 25.0.

The services Purchasing Managers' Index advanced to 28.7 from 12.0 in the previous month. This was the highest score since February and above forecast of 25.0.

The factory PMI climbed to 39.5 from 33.4 in April. The expected score was 38.0.

"Second quarter GDP is still likely to fall at an unprecedented rate, down by around 10% compared to the first quarter, but the rise in the PMI adds to expectations that the downturn should continue to moderate as lockdown restrictions are further lifted heading into the summer," Chris Williamson, chief business economist at IHS Markit said.